Cutting waste while increasing productivity
For Telefónica CTC, the reduction in the scale of its
inventories is just one benefit it can credit to the collaborative
work it undertook with a team of senior consultants who now work
for VISION. Chile's largest telecommunications company, Telefónica
used to have inventories that numbered 120 million items, valued at
US$90 million. After a few months there were just seven million
items valued at a mere US$7.5 million. As a result, warehouse space
was reduced from 150,000 square metres to 8,500 square metres.
"Before the consultants came on board, Telefónica thought of
stock as an asset." says Leonardo Diaz, Telefónica's
organisation and process manager. "Now it sees it as a
liability. A mind shift was created in this organisation and that
led to radical savings."
"Our consultants are having an
immense impact on the results of this company."
Leonardo Diaz, Process Manager, Telefonica
Diaz is a man with a mission - to remove waste and increase
productivity within the company. With 7,500 employees, Telefónica
CTC provides wireless communications, public telephony, Internet
access, data transmission, contact centres and telemarketing
The consultants have been "immensely successful" in
bringing about improved processes within the logistics and call
centre departments of Telefónica.
Telefónica reviewed possible advisers and selected VISION as
possessing a level of business process knowledge Telefónica found
unmatched. Telefónica was under no illusions. Telecom companies are
notoriously difficult to coordinate internally, but Telefónica felt
our team would ably address the key issues.
Diaz believes our critical difference is the way that our
consultants design solutions, and then partner with them to
implement the new designs. "They help change people's
interpretation of what they are doing in a positive way" he
The consultants were asked to substantially reduce the number of
Telefónica warehouses and replace them with virtual warehouses.
Diaz recalls, "Regardless of the amount of cable we stocked
we were unable to fulfil our promises to clients. They created a
process, using Internet technologies, to link us to our suppliers,
reducing the amount of cable required in our warehouses to the
point where now we don't stock any cable at all; our suppliers
stock for us."
Telefónica's logistics department used to employ some 410
people, including 60 contractors. The consultants recommended that
staffing be reduced to 38 staff and 40 contractors. The department
now operates 50% more efficiently after annual savings of US$3.5
million in salaries alone.
"Culture of impeccability"
Telefónica also asked the consultants to help build a shared
interpretation of precisely defined goals in all its business
centres, and to help install a "culture of impeccability" in its
relationships with customers.
In Telefónica's call centre operations, the team set about
improving customer relationships by changing the existing
interpretation of 'attending customers technical needs' to
'creating value propositions for customers.' The change was
supported and implemented on top of improved call centre
A combined team trained 5,476 employees and 372 department heads
in 171 leadership and customer satisfaction workshops.
Additionally, a team of 48 "mobilisers" were trained to establish
and maintain new practices in 38 business centres.
The marked improvement in relationships with customers was real:
the number of complaints received went down by 50%.
"With our consultants we are doing a very good job. Who says
so? Our customers!"
Leonardo Diaz, Organisation and Process Manager,